Global insurance sector M&As fall sharply in H1: Report

Mergers and acquisitions in the global insurance sector continued to decline in the first half, with 103 deals, compared with 171 in the year-earlier period, according to a report from the law firm Clyde & Co.

Surging inflation and interest rates are contributing to the declining number of deals globally as have seller’s high pricing expectations and the increased premium required for integrating technology systems, the firm said.

Six billion-dollar transactions took place in this year’s first half  — three in the U.S., two in Asia and one in Europe.

The U.S. and Canada had the highest number of deals, with a combined 40, and the U.S. had the largest global deal — Brookfield Reinsurance’s acquisition of American Equity Investment Life for $3.5 billion.

There were 31 deals in the United Kingdom and Europe, down from 48 in last year’s first half.

Insurers continue to consolidate in the Middle East, where five deals occurred in the first half.

The M&A market in the Asia Pacific region was somewhat resilient as major Japanese insurers continue to expand their regional footprints, the report said.

Although the number of M&A deals was the lowest since Clyde began publishing the report in 2021, the firm said the market could pick up later this year with large-scale transactions.

“While the total number may not increase dramatically, we are increasingly likely to see deals that span a number of jurisdictions with some of the major carriers now looking to take on books or businesses which span 8-10 countries in one swoop,” Eva-Maria Barbosa, a Munich-based partner and chair of the Clyde’s global corporate and advisory group,  said in a statement with the report